The control of the surface chemistry during sintering is the key factor for the successful and efficient production of PM parts, especially for powders containing elements with high affinity to oxygen such as chromium. The effect of different reducing agents was investigated by performing sintering trials on water atomized steel powder pre-alloyed with 3 wt.% Cr with and without the addition of graphite as well as using atmospheres with varying hydrogen content. The use of thermal analysis and photoacoustic spectroscopy in combination with results from fractographic investigation showed that oxide reduction is enhanced with the presence of hydrogen even if the main reduction mechanism is the carbothermal reactions. Oxides rich in Cr, Mn and Si were formed during sintering for all applied conditions. The findings are summarized in a simple model describing the enclosure of oxides during the sinter-neck development and the changes in surface chemistry during the process.